How ESG is influencing employee benefits to have a greater moral focus

ESG (environmental, social, and governance) has not only been a key buzzword in the corporate world over the last few years, but it’s become a core topic of interest in regard to how many of us are choosing to live our lives.

Environmental and social issues have come to the forefront of society in recent years, and there’s been a real mindset shift when it comes to understanding how personal behaviour impacts the greater world. And as a result, it’s crossing over to types of employee benefits we choose.

While early benefit programmes were standardised by a few core offerings, designed to provide a level of comfort to workers, as circumstances have changed and trust has grown between employers and employees, the way benefits are presented has been able to evolve.

While the pillars of physical, mental and financial wellbeing are generally well accounted for, social wellbeing has accelerated in importance to become a major part of employee experience. Another important factor is today’s workforce, particularly the entrance of Generation ‘Z’. For many, it’s more important than ever before that the companies they work for align with their ethics and way of thinking.

But the shift over to more environmentally and socially conscious benefits has been enabled by the fact that a level of trust has been built between employers and employees.

Employers want to accommodate and react to staff needs, in turn they offer them more choice, which means employees are more open in sharing their personal values and what’s important to them and taking onboard their employer’s recommendations. As a result, this is creating a stronger, more personal employee experience.

Traditionally, environmentally focussed benefits have been underpinned by government incentives such as cycle to work or low-emission vehicle schemes driven by the promise of tax advantages.

ESG investments, including through pensions schemes are already a relatively well-established area, as they came into fruition several years ago but tend to be a level detached from the employer employee relationship.

We’re also seeing a rise in the use of platforms that incentivise climate positive behaviour. This could be a platform that allows employees to track their own carbon footprint and offers tips on how to change behaviours and rewards positive activities.

Employees are provided with the choice to tailor the reforestation or renewable energy activity they support to suit their circumstances and individual carbon footprint.

By Mark Adair – Correspondent, Bdaily